CAPM (Certified Associate in Project Management) Practice Exam

What best describes Pareto diagrams?

1. They monitor performance within acceptable boundaries

2. They show a correlation between variables

3. They sort information by frequency, applying the 80/20 rule

4. They are used to improve communication

The correct answer is: They sort information by frequency, applying the 80/20 rule

Pareto diagrams are a type of chart used to sort information by frequency, typically by applying the 80/20 rule which states that 80% of the effects come from 20% of the causes. This type of diagram allows for easy identification of the most significant factors that are contributing to an outcome. Option A, monitoring performance within acceptable boundaries, is a characteristic of control charts, not Pareto diagrams. Option B, showing correlation between variables, is the purpose of a scatter diagram, not a Pareto diagram. Option D, improving communication, is a possible application of a Pareto diagram but not its primary purpose. Therefore, the most accurate description of Pareto diagrams is that they sort information by frequency, applying the 80/20 rule.